Georgian Prime Minister Submitting the New Draft Tax Code at the Meeting with Businessmen

3 Jun '10

On June 3 at Courtyard Marriott Hotel the BAG and AmCham organized an event at which Nika Gilauri delivered presentation of the new tax code for businessmen.

Besides Georgian and foreign businessmen the meeting was attended by the Minister of Finance of Georgia, Chairman of the Parliamentary Finance-Budgetary Committee, Ambassadors of USA and Germany to Georgia, representatives of IMF, WB and USAID.

Enactment of the new tax code, as declared by the Prime Minister is planned for 2011 and it will incorporate numerous amendments which will eliminate major part of the previously existing problems in tax relations.

Putting the new tax code into effect aims at increasing the confidence to tax system and simplifying tax norms, facilitating and encouraging business legalization, equal distribution of tax burden and bringing tax legislation into compliance with European standards.

The novelty offered by the Code for small entrepreneurs is a significant step towards supporting the employment and reducing the poverty; namely, a person whose annual turnover is not more than 30 000 GEL is totally exempted from tax liability, and if a small size business whose annual turnover makes up 30 000 - 200 000 GEL will be subject to only one - turnover tax whose rate shall be set at 3-5%.

For small, medium as well as large businesses, introduction of advance tax rulings system is an important novelty.

Tax payment and filing monthly liability will be abolished and the notion of honest taxpayer will be introduced.

According to the Prime Minister, the existing customs code will be integrated with the tax code in the nearest future which will further simplify businessmen's relations with tax authorities.

Overall, the new code is as much as possible focused on economic development, creation of additional jobs and encouragement of business. 

Nika Gilauri emphasized that before submitting the code to the Parliament for approval, it will definitely become the subject of discussion and review for all interested businessmen. Representatives of private companies have formed a group of experts which will receive and review the comments and suggestions regarding the code.